AUCTION PREVIEW: ACGB Nov '25 Supply Due

The Australian Office of Financial Management (AOFM) will today sell A$800mn of the 0.25% 21 November 2025 Bond, issue TB#161. The line was last sold on 19 February 2021 for A$600mn. The sale drew an average yield of 0.4531%, at a high yield of 0.4550% and was covered 8.1167x. There were 36 bidders, 11 of which were successful and 3 were allocated in full. Amount allotted at highest yield as percentage of amount bid at that yield was 12.9%.

• Tenders in this zone of the curve have been supported by the RBA's ACGB purchase scheme, with the limited level of DV01 on offer today also boding well for demand. Most desks seem relatively at ease re: the potential for any knock-on impact re: the line on offer from the questions surrounding the potential for the RBA to extend its 3-Year yield targeting scheme to cover ACGB Nov '24.
• We have discussed the record amount of excess liquidity in the space, as measured by the surplus funds lodged on E/S accounts at the RBA, and the potential for Japanese investors to return to ACGB buying, given the turn of the Japanese fiscal year, in depth on several occasions.
• Results due at 0200BST/1100AEST.